Allocating Indirect Costs to Departments Based on the Relative Revenue

question 141

Multiple Choice

Allocating indirect costs to departments based on the relative revenue earned by those departments is done based on which of the following criterion?

• A) direct hours utilized
• B) benefits received
• C) material resources used
• D) cause-and-effect relationships

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Definitions:

Primary group

A small, tightly-knit social group characterized by long-term, intimate, and face-to-face relationships, such as family or close friends.

Primary group

A small social group characterized by close, personal, and enduring relationships, such as those between family members and close friends.

Regular basis

A consistent, repeated interval at which activities or events occur, whether daily, weekly, monthly, or on a similarly predictable schedule.

Spending time

The allocation of one's duration towards various activities or tasks over a period.